1. MRP Model

2. MRP Flow Sales Forecast Run MRP Review Planned Work Order Production
Schedule
Re-Run
MRP
Purchase
Indent

3. Benefits of MRP Optimum Inventory Effective Inventory Management
Reduced lead time of all the agencies involved in planning and scheduling
Automated Planning by System (Accuracy)
Future Planning information to the Supplier (Purchase Forecast)
On line information about Production, Receipts
Information on Inventory balance as of any point of time
Information on Projected Inventory on hand for future commitments

4. Review Production Plan
Steps in Running MRP
Sales Forecast from
Marketing
Enter Sales Forecast
In MFG/PRO
Review Planning
Parameters
Run MRP
1 Month Firm &
2 Months Tentative
3 Months Forecast
By Model
Safety Stock, LT
For FG & Comp
Review Production Plan
Revise PP
(if required)
Re-Run MRP
Generate Material
Requirement Report
PP for FG & WIP
Arrive at Materials
Requirement Plan
Prepare PO based on
Material Requirement
Report

5. Flow Demand Run MRP Demand
Planned
Manufacturing
Orders
Release Planned
Orders
Demand
Run MRP
Sales Forecast
Planned Purchase
Orders
Planned Order
Approval
Prepare PO &
Print PO
Demand
Sales Forecast issued by Marketing is considered as the Demand
Demand to be entered as Sales Forecast in the system against each FG
Three Months Forecast to be entered into the system
First month forecast considered as Firm and the next two months plan considered as Tentative

6. MRP
MRP Control File
Purpose - To set up the MRP horizon, summary default and order Release horizon
MRP Horizon days (Decided based on the Sales forecast entered into the system
and the required Planning Horizon to be generated by the system)
MRP/DRP Combined - No
Summary Default - Monday (For the Default day in Reports)

7. MRP Item Planning Maintenance
Purpose - To define the Planning Parameter for all the FGs, WIP and the Components.
Plan Orders - Yes
Order Policy - POQ - Period Order Quantity
FOQ - Fixed Order Quantity
OTO - One Time Only
LFL - Lot for Lot
Order Quantity - Works along with FOQ
Order Period - Works along with POQ
Safety Stock - Qty to be maintained in inventory as a protection against fluctuation in demand
Safety Stock considered as demand
Safety Time - Receive Material in advance as a protection against late deliveries
Pur/Mfg - “P” -> Purchased Items
“M” -> Manufactured Items

8. MRP Item Planning Maintenance
Mfg LT - Number of days required to manufacture the Item
Due date – Mfg LT = Work Order Release Date
Pur LT - Number of days required to complete the Purchasing Cycle of the Item
Due Date – Pur LT = Purchase Order Release Date
Ins LT - Number of days required to Inspect the Material after receiving the Material in the stock
Minimum Order - Minimum Order quantity to be ordered for an Item when there is a requirement
Maximum Order - Maximum Order quantity can be set up to generate action messages
Order Multiplier - To satisfy Supplier’s Packaging and Shipping volumes
Considered while generating Planned Orders
Yield% - % of an order expected to be in usable condition
BOM/Formula - Alternate BOM to be specified in case of Consumption against alternate Bill

9. Inputs for MRP How does MRP work? Demand Requirement Sales Forecast
Inter Site Request
Requirement
Demand – (QOH and Quantity on Order)
QOH -> Sum of Inventory of a Material at all Nettable locations
Qty On Order -> Open Purchase Orders of a Material

10. Accurate System Parameters Garbage In = Garbage Out
MRP Requirements
Accurate Demand Data
Accurate Supply Data
Stock on Hand
In-transit
Pending Orders
Accurate System Parameters
Garbage In = Garbage Out

11. Three options to Run MRP
Running MRP
Three options to Run MRP
Net Change Requirement
Items for which MRP Required flag is set to “yes” are selected for the Run
Regenerate Material Requirement
All the Items in the Item Master are selected for the Run
Selective Material Requirement
Only those items selected for Planning are planned

12. Item Planning Parameter Finished Goods
Setup
Item Planning Parameter
Finished Goods
Plan Orders - yes
Order Policy - LFL / POQ
Order Period -
Safety Stock - Stock that needs to be maintained in the inventory at any point of time
Pur/Mfg - M
Mfg LT - no. of days required to manufacture (only for FA & PA)
Order Multiplier- optional

13. Item Planning Parameter WIP
Setup
Item Planning Parameter
WIP
Plan Orders - yes
Order Policy - LFL / POQ
Order Period -
Safety Stock - Stock that needs to be maintained in the inventory at any point of time
Pur/Mfg - M
Mfg LT - no. of days required to manufacture (at each section)
Order Multiplier- optional

14. Setup Item Planning Parameter Sub-con Items (only for ONGKOS Items)
Plan Orders - yes
Order Policy - POQ
Order Period - to combine no. of days requirement into one order
Safety Stock - Stock that needs to be maintained in the inventory at any point of time
Pur/Mfg - P
Mfg LT -
Pur LT - No. of days required to complete the Purchasing cycle
Minimum Order - Minimum Order quantity
Order Multiplier - optional

15. Setup Item Planning Parameter Purchased Items Plan Orders - yes
Order Policy - POQ
Order Period - to combine no. of days requirement into one order
Safety Stock - Stock that needs to be maintained in the inventory at any point of time
Pur/Mfg - P
Mfg LT -
Pur LT - No. of days required to complete the Purchasing cycle
Minimum Order - Minimum Order quantity
Order Multiplier - Satisfy Packaging/Volume constraints

16. Impact due to Planning Parameter
Mfg / Pur LT - Order Release Date
Safety time - Order Due Date
Safety Stock - Demand
Pending Order - Added to Projected QOH based on the Due Date
Minimum Order- Works along with Order Policy & Order Period
Order Multiplier- Works along with Order Policy & Order Period